<< I am working over 51 stitches. The pattern is called a Snail Stitch
It says K 1st row. 2nd row *P1 YON* 3rd row *pick up 3 sts.loosing yarns.put 3 sts on left needle and introduce right needle through 3 sts pulling 3 sts as follows; K1 YON K1 4th row P. >>
The 3 stitches are already on the left needle so you don't have to put them there. You have to insert the right needle into 3 stitches on the left needle to loosen those 3 stitches because you are then going to knit into the 3 stitches and it can get pretty tight. Knit the first stitch of the 3, yarn over, knit 1 more stitch, then pull those stitches off the left needle. This maneuver doesn't really decrease the total number of stitches because you still end up with 3 stitches, so this is apparently not the decrease. The last stitch of the original 3 doesn't get knit again but has been caught when the right needle goes through the 3 stitches so there won't be an un-knit stitch.
It would make more sense to knit the 3 stitches together then K1 YON K1 but you wouldn't get the effect of the twisted stitch (in the picture this is the stitch under the rightmost white ribbon).
I really think something got lost in the translation; for instance, "Pulling 3 stitches as follows" should really read "working the 3 stitches as follows".
I don't know if this will resolve the problem, but good luck. It's such a beautiful dress!